Good afternoon, everyone. This is Thérèse Byars speaking, and I'm the corporate secretary of FRMO Corp. Thank you for joining us on this call. The statements made on this call apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that any of the security transactions referenced today have been or will prove to be profitable, or that future investment decisions will be profitable or will equal or exceed the past performance of the investments. For additional information, you may visit the FRMO Corp website at www.FRMOCORP.com. Today's discussion will be led by Murray Stahl, Chairman and Chief Executive Officer; and Steven Bregman, President and Chief Financial Officer. They will review key points related to the 2023 third quarter earnings. A replay of this call will be available on the FRMO website until the summary transcript is posted. Now I'll turn the discussion over to Mr. Stahl. Okay, thanks, Thérèse. Thanks, everybody, for joining us today. What I'm gonna do is I'm just gonna touch on a couple of key points, and then I'm gonna address the questions. you know where I was yesterday. I just got back today, so, enough said on that subject. In deference to some requests we had, I normally would read to you, how much Bitcoin we have and how much Grayscale Bitcoin Trust we have, et cetera, et cetera, et cetera. It's now all on our website, and you can see what the tables look like. It's all there for you, so I won't read it. However, with regard to Bitcoin, I'm gonna give a little further explanation and a highlight that I don't see on this table. If you look at the table, the one thing that I would have liked to have been on here but it didn't make it, I'll give you one further number. You'll of course recall that we own roughly 31% of Winland is, among other things, a mining company. Winland loans in round numbers 63 Bitcoin. The actual number is slightly different by a decimal point, forgive me for giving you the round number, but roughly 63 Bitcoin. We own 31% of that, you take roughly a third of that, you'd add that in. I just wanna make that little comment. I also want to add that it's worthwhile now that I made that little comment, I don't really talk about Winland lots, so I'm gonna take this occasion to talk about something I normally don't talk about. We'll get into crypto, and now they're your questions. Winland started out as an electronics company and it still has that business. Basically makes a variety of sensors. Not a huge business, but it's a fine business. There was no reason to disturb that at all. We made it a crypto mining business. However, one of the interesting things about the business is that we didn't invest huge amounts of capital in the machines. It's important to state that the way we look at this is when we buy a machine, it's worthwhile noting we pay for it in Bitcoin. When we're buying mining equipments, we disperse X Bitcoin, and the logic of the disbursement is that the X Bitcoin becomes, in the fullness of time, X plus an increment of Bitcoin. The idea is the process of mining as a business, the idea is to turn it into more Bitcoin. You're transforming Bitcoin into more Bitcoin. It's almost like Bitcoin with interest, if you like, except it's not an interest because it's an at-risk investment. There's no guarantee of success. Specifically, it's very close to about three years ago, we did the first of the Winland transactions. You'll recall at that time, FRMO with Bitcoin, of course, what's the machines? They were then state-of-the-art machines. We then swapped them to Winland in exchange for stock in Winland. That's the primary way we've been able to increase our Winland position. Anyway, the number of Bitcoin that Winland has, which is all derived from mining incidentally, is available for you. If you simply took the current price of Bitcoin and you multiply it by, in round numbers, 63, you'd see what that number is. That number is much greater if you look back to the original cost basis of the machines. What do we do? Now when I said you're investing X Bitcoin in the enterprise of mining, and this is a good time to talk about it because those machines in about three or so weeks are going to be fully depreciated. When we bought the machines, the idea was they'll last for about three years. You can look back and see. You look back at the price-But what Bitcoin was that day, you'll see how much. Or you can just look at the, the dollar value of the transaction. You can see how much money we invested, and the Bitcoin we have is worth more than that now. Incidentally, that 63 Bitcoin didn't come entirely from those original machines. We bought some more machines, but that first transaction was an important transaction for us. We didn't transform the first investment in 63 Bitcoins. We transformed all our investments into 63 Bitcoins. It's important to note that so it's not, so it's obvious to everybody. In any event, that's a very profitable endeavor. That's the way that I believe one should measure a Bitcoin investment. It sort of leads one to a bizarre conclusion when people pose the question in the following manner: What is the cost to mine a Bitcoin? The problem is, even if you have a high profit margin, you have to factor in the ultimate obsolescence of the equipment. Incidentally and interestingly, even though this equipment, the first equipment, is almost fully depreciated, there was shortly after a second tranche of equipment that's not fully depreciated, but almost fully depreciated. Basically, that's fully depreciated equipment we're still running, and we're still making Bitcoin on. What's gonna happen in about three weeks, assuming the price of Bitcoin remains where it is or goes higher, the equipment that they will have no book value is gonna be generating more Bitcoin. That was the logic of the investment, that with our, with our expertise from our other investment, HashMaster, we're able to maintain the machines, repair the machines we need to repair them. We can get a lot more out of the machines than we put into them. That's the nature of Bitcoin, of the Bitcoin mining business. It has a further implication. What's the further implication? Well, there's all this talk about Bitcoin and cryptocurrency ETFs, and it's all well and good, but it has a problem that Winland is designed to solve. What's the problem? Well, if you had a cryptocurrency ETF as opposed to a customary ETF, the singular distinction is that a customary ETF that owns stocks and bonds, the expenses, whatever they happen to be, are paid for by the interest income or dividend income to securities in the fund. In the case of a Bitcoin ETF, there is no income. The only way you could manage a cryptocurrency ETF is every time there was expenses, you'd have to sell a certain number of coins. Let's create an imaginary cryptocurrency ETF. It has xxx Bitcoin in it. Let's assume, just for ease of computation in this format, this fund is in steady-state mode. What does that mean? That means that no new money is coming in to buy more Bitcoin. No money is going out to pay shareholders for redemptions, therefore we have, we're not selling any Bitcoin. What would happen, steady-state mode is because there will always be expenses, the number of Bitcoin per share would be declining. Compare that to the figures I just gave you on Winland. Number of shares, you know what they are. We're actually increasing the number of shares when we did this Winland transaction. The critical variable is the number of Bitcoin per share. The number of Bitcoin per share, I invite you to do the calculation, is rising. You have two different paradigms for investment in crypto. One, a simplistic holding model. By its very nature, I would submit to you, would involve reducing, in the fullness of time, the number of, if it were Bitcoin, this example, Bitcoin per share. The other, which we're using within this example, the increased number of Bitcoin per share, and I invite you to consider which one is better. A lot of work has been done to make this possible, so it's not just me. There are a lot of people behind the scenes, and I just want to say it's not myself personally. That's another thing about how FRMO is evolving as a company. There are other businesses that we hope to turn into true operating businesses one day, and we're doing it in our customary gradual risk-averse manner. We're making some pretty profound changes. We're just making it in very small steps because the entire field of cryptocurrency, it's new for everyone, and every day is a learning day. I gave you a highlight of what's going on at FRMO, in this case with regard to crypto. All the other investments are in steady-state mode, and you've heard about them, perhaps too much in the last several weeks, so I won't go into it unless somebody needs some precise answer to a question. I'll invite you sure to, Thérèse, to read me the questions, and I'll be more than glad to answer whatever is on people's minds. Maybe, Thérèse, with that, you can read me some questions, and I will answer them. I'd be glad to. Okay, the first one is: During the January 17th, 2023 call, Murray said or implied that we can see in the financial statements what revenue FRMO receives from its “ownership interest in HK LLC revenue stream.” I don't see where that information is available, and Marie did not provide a quantification on the call. Would it be possible to provide this information in a time series for the past three to five years? Perhaps what you guys figure is the sustainable revenue without performance fees or one-time items. It sounds like whatever. Okay. Oh, there's just a little more here. Go ahead. Sorry. That's okay. It sounds like whatever revenue is received is a straight flow through, so we can basically capitalize this revenue stream as the value to FRMO. Perhaps a 15x multiple or a 20x multiple would be appropriate. That's the end of the question. To begin with, in essence, there's some slight modifications, what I'm gonna tell you. If you look at under revenue, fee and other income line, that's almost entirely the HK revenue share income. There are some minor fees that we collect from some other sources. They're really minor. They're just rounding errors. If you need a real breakdown, we give you the breakdown. The breakdown you might want is the performance fee versus not the performance fee. If you just went to all our financial statements and looked at them, you'd be able to tell just by looking at them, because the years they go down, that's without performance fees. The years they go up, that's the performance fees. You'd be able to tell anyway. If it's possible, you know, if Thérèse, if you can create a table, and break it down between performance fee and I guess non-performance fee, I have no problem releasing that information. If people find it helpful, let's get them the data. Basically, with these modest exceptions, they're truly modest. Maybe it's only worthwhile breaking out. It's like a certain amount of work. Almost the entirety of what we call fee and other income is the HK revenue share. I hope that's a sufficient answer for the moment. Okay. Yes, we'll work on that table. Next question. Separately, in responding to my question about the ownership interest in HK on the last earnings call that sits on the balance sheet at $14 million or so, I'm not clear how we, as outsiders who don't have the visibility into the HK financials, can estimate its true value today, let alone where it might be in the future. I think we all know it's a lot more than $14 million historical cost. How much so? Is there any information that can be provided? If it's already provided, please let me know where to look. That would shed some light on what the business generates in terms of sales, profits, et cetera, so we can make an educated estimate of what FRMO's 5%-ish ownership interest may be worth. Okay, fair question. There are a number of approaches you can use analytically. I personally would approach it methodologically in the following manner. If you look at the number, which as of February 28th is $15 million plus, that value is largely derived from the investments that are held on the balance sheet of HK. There is some loosely described plant and equipment, computers, leasehold improvements, things of that nature, office furniture, but the bulk of it is the investments. If there were no money under management whatsoever, that number wouldn't change tremendously. The question is, all the money we have under management, what is that worth? Different ways of approaching it. Some of it is performance fee income, which might get a higher multiple. Some of it is conventional investment management fees that arguably deserves a lower multiple. The way I look at it analytically, I would say a diversified investment management company, especially one that has some really interesting projects on the move, like our involvement in crypto. By the way, we also have some crypto investments in HK, one of which is our investment in HashMaster, because HK owns 50%+ in HashMaster, and I would argue that's probably worth more than the carrying value. In any event, we take the assets under management with, let's say, roughly $7.2 billion, and if you said there were 3% of assets under management, you could do the calculation. If we have a carrying value of X and if it's roughly a 5% interest, you would divide by 0.05 or multiply by 20. If you did that, the number of $15 million, crude numbers, that gets you $300 million. Then you'd multiply the assets under management by 3% or 0.03 if you like. You could do that calculation. The sum of those two numbers, I would think, would give one a reasonable valuation. You would take the sum of those two numbers. Five percent interest, you multiply by 0.05, and I think that would be a fair approximation of the value. That's a methodology you'll have to do the calculation. I hope you find it adequate. Next question. How should we think about the current value of FRMO and whether it's undervalued today? The majority of the assets, as best I can tell, are valued at fair market value, TPL, GBTC, the funds, et cetera. This is clear-cut as to the current value. There are lots of relatively small investments measured at cost, but they don't seem that material. The primary assets I can see on the balance sheet that could be materially undervalued are the two I've inquired about above. Perhaps they are worth as much as $100 million or so more than stated book. FRMO's tangible equity, netting out non-controlling interest, is $224 million or $5.09 per share. If I add in $100 million of excess value above book value for these two assets, I can add another $2.25 per share and get to perhaps $7.35 per share or so. Are there any other meaningful chunks of undervaluation on your balance sheet where there's another $100 million of value? I don't know how much undervalue there is or not, because that's an entirely subjective criteria. I can just tell you what we're trying to accomplish. What we're trying to accomplish is build an operating business out of literally nothing. That operating business, or you could even say several operating businesses, relate to crypto, cryptocurrency. Some of it relates to Bitcoin mining. Some of it relates to, you would say cryptocurrency infrastructure and support, like HashMaster. We don't know how cryptocurrency is going to develop in the future. Personally, I'm very optimistic, but the entire cryptocurrency project is still an unproven enterprise from everyone's point of view, and as I said earlier, we're still learning. I would be hesitant to say what the value of it, what the valuation of that, might be. In success mode, obviously it could be pretty considerable. Let's look at it this way to try to give you an idea. I'll just bring it back to Winland. We buy these machines. We put them on the books, and we have to estimate a certain useful life. We estimated three years. Maybe that's too conservative. Maybe it's not. Other publicly traded companies use five years. Maybe that's a better estimate. Our experience is in the mining space, the machines become obsolete, something like three years. In the case I just cited, we're very happily not in that circumstance, but it could change in weeks. We'd like to be conservative. In any event, what was the example I cited? We took a machine. You could debate what its estimated useful life is. In success mode in crypto, we converted that asset, if you want to look at it this way, to Bitcoin. Infinite life. We're taking finite life assets, converting them into infinite life assets. Let's look at it in an inflation sense. Imagine we were a gold mining company. Instead of mining gold and selling it, we're mining the gold. We're only selling enough gold to just pay our operating expenses, and we kept the money, meaning we kept the gold. Let's just say we're a gold mining company in the year 1900. That was our practice. We would sell enough gold to cover our operating expenses, and we would have put the gold in a vault. No company ever did that with one exception, which is Goldcorp. It's a Canadian company that was ultimately acquired by Newmont, and Newmont ceased that practice. There was a number of years Goldcorp was actually doing something like that. The world has very limited experience with that. If you do the calculation, there was a company in the year 1900, they're extracting gold and just left the gold in the vault. It would mean it would be on its balance sheet. What would be its net asset value today relative to the same company with the same production and just sold it along the way? I think the answer is obvious. It would be much, much higher. In a sense, that's what we're trying to do. Now, it's made it a little more interesting in the case of crypto in the following reason. For the following reason. The following reason is, in the world of gold, if the price gets high enough, the world's going to extract more gold. In the case of crypto, specifically Bitcoin, no matter how high the price gets, there's only at the moment roughly 1.6 million Bitcoin ever going to be mined. For the next 375 days, roughly, they're gonna be mined at the rate of 6.25 every 10 minutes. In 375 days, there's gonna be 1.3 million coins left. We know the rate of production of those 1.3 million coins is going to be between that date, roughly a year from now, and the year 2140. There's a lot of scarcity value. It's called digital scarcity. If you can enforce digital scarcity, is that a better tethering device for currency than gold? Obviously, the fiat system in the world is clearly breaking down. I would argue that even though there's lot be said in favor of gold, and we have gold related investments, digital scarcity, assuming it can be faithfully executed, which is still an open question, but I believe it can be done. We're building a company that is gonna hold digital scarcity instead of gold scarcity. What would that theoretical company in 1900 would have been worth? Would it have been worth the value of the mining equipment at 1900 prices plus the small amount of gold it had in the vaults? Was it worth that? Are you able to make some assertion of what the gold price might be since your business model is gonna be unchanged for next 123 years? Are you entitled to make some kind of assertion as to what your net asset value is ultimately gonna be and then discount it at a different rate? It's just an open question. I don't know the answer to that question, but that's the valuation paradigm that has to be solved. That's what we're trying to do. You think that the enterprise will be successful and it's gonna have an appropriate growth rate, well, then you know what the answer is. If not, then you would value it at an asset value. That's the valuation enigma, so to speak. I hope that's a lot of information. Next question. Please elaborate on what entails a non-cash fee revenue. I can probably answer that. Steven here. That's cryptocurrency mining revenue. That's how, on an accounting basis, the income is booked as the crypto is mined, 'cause the crypto is retained on the balance sheet, but as it's mined, you calculate the sales value of it, the market value of it. That's just an accounting entry for the value of the crypto at the moment of mining. Okay, next question. I wanted to see if you had any thoughts on the rise in mergers and acquisitions activity we are seeing in the oil and mining sectors. Just in the past week, we've seen Exxon connected to Pioneer Natural Resources and Glencore attempt a takeover of Teck. Should this activity bode well for FRMO's holdings, either direct or indirect, via revenue from the Inflation ETF? Well, let's do it this way. In the world of gold, you could make the assertion that something like two years now, the way mining executives describe it, they describe it as a hole in production. What does that really mean? That means that unless something is done roughly two years from now, the production is going to drop. Why is it going to drop? Because we really, as an industry, we really haven't been investing in the way historically industry has been, has invested. Two years is not enough time to start projects and bring them to production levels, so that explains the merger and acquisition activity. Oil is the same thing with one singular difference. That difference is there's a geopolitical dimension to oil that doesn't really exist in the world of go;d. There is a slight, just to complete the thought, there is a slight geopolitical dimension in that you'll note there's central bank, heavy central bank buying of gold in the last six or so months. That's nothing like the geopolitical orientation of oil. What's the geopolitical orientation of oil? You'll observe that the nation of Japan, a little while ago, announced they're going to buy Russian oil. They were part of the sanctions against Russia. The oil is going to now be moving east to Japan. You'll also observe that Saudi Arabia has made oil deals with China, and the oil is gonna be sold for Chinese currency, and presumably Saudi Arabia will use the Chinese currency to buy products from China. In addition to an OPEC cut, and who knows if that's going to be successfully carried out or not, but in any event, from the Persian Gulf, you have Iranian oil moving east to China. You're gonna have Saudi oil moving east to China. The Chinese have lifted all the growth constraints on their economy. Production cuts, the Ukraine war, the Chinese lifting of growth constraints. You can tell what the investment oil is by just looking at the rig count, the global rig count and the United States rig count. We've got an issue in the world of oil. There's not enough time to make the investments that need to be made, if they indeed could even be made, given the hostility to the energy industry. The next logical thing to do is to engage in merger acquisition activity. If the food industry historically became an oligopoly, and if the communications industry became an oligopoly, the information technology industry is an oligopoly. There's lots of oligopolies in the world. Why would people think that the world of metals and mining wouldn't be an oligopoly? Why would people think that the world of petroleum wouldn't become an oligopoly? Especially since going back over a century, that's exactly what it was. I think we're heading in that direction. That's part of the inflationary hypothesis. Hope that's enough, Thérèse. Yes. Next question is from a shareholder self-described as nerd who likes libraries. On the Horizon Kinetics website, many of the pages have a picture of a library that appears to be computer art. If any are an actual location, please name the library and location adjacent to the picture on the website. Less of a question, more of a request. Well. Okay. Okay. I can answer. They're actually real libraries. Why don't you answer it, Steven? They're real libraries. They are real libraries. Computer. I can understand. I think they're so beautiful. I can understand why some of them are so odd looking to us in the twentieth century versus a, like, nineteenth, eighteenth century space and architecture and art devoted to these rooms, how one might think they were artificially constructed. The names of the libraries are the Stephen A. Schwarzman Building of the New York Public Library, the State Library Victoria in Melbourne, Australia, the Stuttgart City Library in Stuttgart, Germany. That's the one that's all white. It looks like a plastic building block construction. There's the Morgan Library & Museum in New York. There's the George Peabody Library in Baltimore, Maryland, The Trinity College Library in Ireland, Dublin, the Yale University's Beinecke Rare Book and Manuscript Library, the Strahov Library in Prague, Czech Republic. I took that question also as a kind of a request. Those at Horizon Kinetics who deal with our technical aspects of our website, are now working on attaching those designations to each of the appropriate or the matching photos. That should be coming. Those were chosen, by the way, by other employees who have been in a positive sense, constructive sense, inculcated by Murray with an appreciation of history and old and rare books. There's a group effort went and selected these various photos, which they properly paid for because we believe in intellectual property rights from the purveyors of those images. Thank you, Steven. The next question, does management have any family that also holds significant amounts of FRMO stock? I'll speak for me, myself first, and Steven, then you can answer. In my case, it's in my name and my wife's name. The other family member, is to the best of my knowledge, don't have anything that's meaningful that you could add to the total. In my case, I did not share it with my family, but my wife did request some years ago, many years ago, that she wanted me to buy 100 shares for her, which I did. Her motives for that might have been different than mine might have been. Her training is different. She also asked me once to buy 100 shares of Facebook, which I did as requested. I don't necessarily agree with all of those choices, but I was serving her interests. Okay. Given that, for FRMO quote, "The identification of any business opportunities will follow the process employed by Horizon Kinetics." End quote. Could management describe what this process is, as well as provide some color as to what the culture of Horizon Kinetics is like and how it is maintained? How are decisions made between the founders at FRMO, and what are the main things that management is looking for when identifying attractive investments that may be different from what other investors are doing? Okay, well, those are a lot of questions. I'll try to. It would require a lengthy period of time to answer them all. I'll try to distill it into something that's relatively digestible. Let's do it this way. If you made a list of the companies in the S&P 500. Those industries generally represent the investment alternatives. The sectors, the industries, those represent the investment alternatives examined in groups. The trouble, they're different industries. There's utilities, there's banking or finance, if you like, there's technology. To us, those investments represent two really big problems, or those investment choices represent two big problems. First problem is that in some of the investments, let's say banking, it's very hard to do due diligence because you're dealing with a lending portfolio, and it's very hard to figure out what's in there and how creditworthy it really is. The analytical problem in some industries, and we'll leave it at that, is just beyond our ability. Second problem is some of the industries, they're within the circle of our competence. We could understand them. Remember, you have to think of the S&P industry sector as individual companies to visualize this. Most of the business opportunities are fairly mature. Let me just pick a company in the S&P to illustrate this. I'm not picking on this company. I have nothing against this company. We use it as an example because it's an obvious example. If I were to choose McDonald's, I have nothing against McDonald's. The food is available, generally speaking, throughout the planet. Anybody who wants it could buy it. Anyone who chooses not to consume it, whatever their reason is, will not consume it. Consumer preferences, such as they are largely fixed. How can one grow that business? The problem is only at the expense of a similar business. The world food consumption, given the population growth trends, is not gonna increase dramatically. What might change is the choices people make, either for one company or against one company. A lot of the companies, the business prospects are kind of static. That's problematic if you want to grow net asset value. Once you exclude, and there's hundreds of examples of that, I just gave you one. Once you think of that, it's easy to say, why does FRMO buy business A or business B or business C? Surely it must be those that are within your circle of competence. Of course, there are. Then we have to deal with the problem of stasis. In a mature industrial economy, that might be an unmanageable problem. If you really want to grow net asset value, we have to take what limited skills we have and apply it to an emergent business. When you look through the range of emergent businesses, what are your choices? We could develop pharmaceuticals, but I don't have to go into it. We're not going to develop pharmaceuticals. We could develop, you know, artificial intelligence, but I don't have to go into it because you know we're not going to develop artificial intelligence. You have to pick something which is within our circle of competence, where we have more than adequate capital to invest in it without risking the bulk of our capital. That's how cryptocurrency came about. There may be, will be other related opportunities in the crypto space, and there may be related opportunities in the financial services space in things like exchanges, custody, businesses that pertain to financial management. That's where the bulk of our effort was directed these last six or seven years. We selected the cryptocurrency space. Going back to the example of Winland, because there it's a cleaner company. There aren't all the different investments that you have in FRMO. Basically, as I said before, we're converting, we're taking asset and growing the asset at its internal rate of return by converting it into money equipment, which then becomes converted into a permanent asset. How many businesses in the world can you acquire a capital asset and convert it into a permanent asset? You can't do it in energy because the energy has to be consumed. You could theoretically do it in gold if you or silver, even, if you wanted to hold all the gold in your balance sheet and not sell it. It's just that we can't find a business like that because nobody does that. If there were a company that did that, we'd be very interested. The closest you find that are royalty companies where you say there's a future earning stream based on gold. You could say, well, at least there is gold in the ground. Even there, it's going to be converted into cash. I guess I hope this now gives you an insight into how we came up with our, where our ideas, and how we then deployed the resources we had available, both capital resources and human resources. This, the process takes a long time. It's a lot of discussion and a lot of small attempts before we commit any meaningful amounts of capital. A great deal of thought and discussion goes into it. Over the years, if you look at all the transcripts of these calls, and you compare the early ones with the one we're doing right now, I think you'll see the evolution of the ideas play out. Remember, we're learning as we go, because no one's ever written a textbook on this subject. If there were a textbook on this subject, chances are it'd be a mature industry, and maybe we wouldn't even be interested in it. I hope that gives you some insight. Okay, next question. Mr. Stahl has in the past talked about how the investment case for Bitcoin revolves around the idea that Bitcoin and blockchain enables Hayek's idea of the denationalization of money. Some questions I have around this thesis are, one, the global currency market already exists for existing sovereign currencies to freely compete for people's adoption, does it not? For example, my understanding is that Venezuelans prefer to transact in USD, U.S. dollars rather than the domestic currency, which is actually Thiers' Law, not Gresham's. Two, given the first point, has the euro dollar already won the competition of currencies, the euro dollar being backed by the quote, energy, end quote, of the military and political breaches of the world's only superpower? That's the question. Well, okay, I'd answer it this way. The dollar, the euro, all the currencies, they have one thing in common. They are fiat currencies. They're constantly debasing. The nations behind them, although you could say that, well, nation backs it, but the obligation of nation is only give you a unit of currency, so it's not tethered to anything. If you happen to have a dollar in your pocket, and you pull it out and you look at it, what does it say on top of it? It says Federal Reserve Note. What does that mean? That means if you went to the Federal Reserve, and you want to change a dollar for this dollar, you can do it. If you want to get an asset, you have to go on the market and buy it. Basically, what is a dollar? A dollar is an obligation of the central bank. It's an IOU for a dollar with no interest. Basically, it's a non-interest-bearing perpetuity. That's it. That's what money is. That's all it is. The money supply is increasing, and it's increasing in every place in the world faster than the supply of goods and services. If the money supply increases faster than the supply of goods and services, you get inflation. If the money supply decreases relative to the supply of goods and services, you get deflation. Fewer dollars chasing the same quantity of goods leads to deflation. It's very, very difficult to keep the money supply matched with the production. In this particular case, globally, no one's trying to do it anyway. There are nations like Venezuela that have a chronically high inflation rate. Dollar is superior. This is the U.S. dollar. The U.S. dollar is superior only because the inflation rate in Venezuela is so high. When we talk about inflation and we talk about debasement, we're only talking about a difference of degree. If it were possible to be long the dollar and short the Venezuelan bolivar, that spread you could make a lot of money on. How do you sell short the Venezuelan bolivar in a controlled economy? Operationally, it may not be feasible. The world has two choices at the moment. There's precious metals and there's crypto. Precious metals, even though the idea of tethering a currency to precious metals to prevent debasement is a good idea, but there have been episodes in history of precious metals even leading to inflation. Like the influx in the sixteenth century of gold from the so-called New World to the Old World. That is in a great inflationary episode of history. Some historians argue the world hasn't even recovered from that. Some people call it the price revolution. If even gold and silver can have debasing values, there really is a market for something that we would call digital scarcity. Hayek and Denationalisation of Money, he never thought it out that far. He was never able to envisage how you would overcome the authentication problem. He could only envisage you have to take money away from the governments and the central banks. How do you know the people who control it will abide by a set of rules? The answer was, of course, you wouldn't, you couldn't know. The second question was, what mechanism is going to assure you that they are indeed abiding by the rules? There was no mechanism until the advent of blockchain and really until the advent of Bitcoin. In case of all these other cryptocurrencies, maybe I'll pose a question that you didn't ask and maybe you thought about. I'll ask it for you. Why can't these other currencies play the same role? The answer is because of the government's mechanisms, that in most cases, there's a committee of people that could theoretically change it if they felt like changing it. In case of Bitcoin, it's only a majority of users could change it. Let's say they did that. I personally think it's very unlikely, but I could be wrong. Say majority of people decided we would like to debase this currency. You see, your protection is it's open source code. You could by yourself fork the Bitcoin and leave it in its undebased fashion. That may be only a minority of people want to use it, and that's fine, because you don't need the majority of people ever to accept it. All you need is the community of users, however small, will be able to exchange a currency that is not being debased. Anyway, come back to the thrust of your question. I don't think any of the fiat currencies on the planet are gonna be able to displace or replace crypto. One other thought I will leave you with, look at the various SEC publications. Go on the SEC website and look at how many people are being hired with expertise in crypto. That's the United States government. I think that tells you everything you need to know about the future of crypto. What's next, Thérèse? This is a rather long intro to a question, a couple of questions. Another question related to Hayek and Gresham's Law. From the third quarter of fiscal 2022 FRMO conference call, it appears that management is betting on the store of value case wherein people aim to hoard the asset, in contrast to the medium of exchange case. In the store of value case, does Hayek's money denationalization even matter here, since he appears to actually favor Thiers' Law? In Denationalisation of Money, chapter six, titled The Confusion About Gresham's Law, Hayek seems to argue against the hoarding tendency of good money. He mentions that Gresham's Law is not, quote, "Not false, but it applies only if a fixed rate of exchange between the different forms of money is enforced." End quote. A new quote, "Enforced," end quote, is the key word here, which does not seem to be the case in our current world, where a free market of global currency exchange exists, which includes the ability for people to freely exchange USD, U.S. dollars. That is, quote, "Bad," unquote, money enforced by governments will not, quote, "Drive out the good." End quote. Will not remain in circulation because a floating rate exists between currencies. In what seems to be further implicit support for Thiers' Law dynamic relating to Bitcoin's inflation hedge narrative, Hayek claims that, quote, "Whenever inflation got really rapid, all sorts of objects of a more stable value, from potatoes to cigarettes and bottles of brandy to eggs and foreign currencies like dollar bills, have come to be increasingly used as money." End quote. From this perspective, applying Hayek's thoughts to Bitcoin seems to actually be making an argument against the store of value case for Bitcoin. In fact, as a practical example, in the previous quarterly call, Mr. Stahl mentioned that crypto mining companies themselves are transacting in Bitcoin rather than U.S. dollars versus hoarding Bitcoin. Given this information, I wonder how much of Bitcoin hoarding is based on lost keys or on some factors other than Gresham's Law. Bottom line question being, is management's apparent dual reliance on Hayek's work and Gresham's Law inconsistent? That's the question. Before I answer it, let me just define some terms. Just so everybody know what we're talking about. There's Gresham's Law. Gresham's Law states bad money drives out good. In other words, what would happen is the so-called sound money, you would hang on to that. Some people use the word hoarding. You would hang on to that. If you want to buy something, you would use the debasing currency. There's a contrary view, what's called Thiers' Law, spelled T-H-I-E-R-S, and that gives the opposite view. That says based good money drives out bad. The good money drives out bad. Where does that come from? That comes from if you take the perspective of the people services to sell. Why should they accept bad money? They want to sell money. In the instances where these laws came to play historically, meaning the originators of the law, they were thinking about gold. For Thiers' Law, they would say, "Yes, I understand that there's the base in currency, but I are of some product. I don't want that. I'd much rather have the gold." In different circumstances, we've seen different situations occur. For example, let's look at, does it say historically? Historically, during the Civil War, when the North had to buy all kinds of goods and services for the military, you could say that might be an instance where Gresham's Law actually came into play. Even though the government set the price of gold traded way above its parity, meaning gold traded way above the price set by the government. You could take the case of, let's say, occupation Germany post-1945, that there was occupation currency, but no one wanted it. Why did no one want it? The American occupation authorities gave the plates, the production plates, the printing plates for occupation currencies to the Russians, Soviets, and they obviously made use of that privilege. If you happen to have real goods and services people wanted, they wouldn't sell it, generally speaking, for occupation currency. Things like bread, cigarettes, other things became currency. What was the problem with that? Well, for short-run purposes, because you need these things, they actually became the equivalent of money. For long-run purposes, you can't store bread. You can't store most food products. You can't even store cigarettes for very long periods of time because they become stale. It's hard in practice for most products to enact Thiers' Law, although in the case of gold, it's been observed to happen. It's also been observed to happen in silver. Anyway, just wanted to give you that background so you know what we're what we're coming from. You know, where we're actually. Relying on a store of value theory. We're not relying on a transactional theory. We're not relying even on Hayek's conception, what money is supposed to be. It's just none of it. All we're asserting is that the post-World War II fiat money system is breaking down. There's gonna have to be an alternative to that. That before it wasn't as visible as it is now. Now the cracks in the system are highly visible because there are nations that are openly saying they wanna move away from the dollar as a world reserve currency. If that happens, we really have untethered inflation in the dollar area, and we might have a lot of inflation, probably will, in other fiat currencies as well. What the world currency situation is gonna look like in a few years, just don't know. All we know is the fiat system is breaking down. Bitcoin, it's merely one possibility. It's not the only possibility. The reason I personally like Bitcoin is it's not within the control of a small group of people and has open source code. In certain respects, it's better than gold. In the case of commodities that ultimately are consumed, I think it's better than a commodity standard. It's probably even better than a, than a gold standard, because given the printing power, there's no limit to the number of ounces of gold that could be created. As it pertains to Bitcoin and people lost their keys, I don't think in the case of Bitcoin, it's a large factor. Chances are it's X%. I would assert that I do not know if that X is in the single digits. I don't know if it's 3% or 4% or some other number of keys that are lost. You could say the effective supply of Bitcoin is maybe 4% or 5% less than the actual supply of Bitcoin. That might be true. We can't say at this point whether it's gonna be Thiers' Law or whether it's gonna be Gresham's Law. We don't know if it's gonna be hoarded. If I had to guess, this is nothing other than idle conjecture. In an investment sense, we're not guessing. We just think that a system of digital scarcity is superior to any other system. That's the only assertion we're really making. If you want me to guess what's gonna happen. For purposes of expenditures, governments are going to use their fiat currency. For purposes of revenue, however, they of course will accept, let's say, the United States government, they of course will accept the dollar as legal tender, let's say, in payment of taxes. I believe ultimately they're going to accept Bitcoin. Ultimately, I believe the government is going to hoard it. I believe the day is going to come that people are going to be able to pay their taxes in coin, Bitcoin. If you own low basis Bitcoin, so the government collects a store of it, they might even let you pay taxes without realizing the capital gains on its appreciation just to get that. There's going to be a hold in crypto, and they'll use it as a device to try to rescue governments from insolvency. I really believe that's gonna happen because the way it's going, you have a lot of governments, they're on the road to insolvency. They won't really default. They'll just keep creating currency. The financial situation of most governments in the world is actually pretty dire. Anyway, that's how I think it's going to ultimately evolve. We're not making a bet on hoarding. We're the opposite. All we're going to say is that digital scarcity is better than the available alternatives, and that's about as far as it goes right now. Next question. Can you please discuss in further detail the expected value of the Mt. Gox claims, its timeframe of realization, i.e., early payout in six to 12 months versus late payout in many years, and what do you intend to do with the proceeds? Since it will likely be received in Bitcoin, will you simply hold? I'm aware that you've mentioned in the past that you are sharing in the upside with some of the claim sellers. It would still be great to put a rough number together on how many Bitcoin you anticipate receiving and what that'll mean for Winland and FRMO holders. What was the cost basis of the investment? Is it the full $350,000 on the balance sheet of, or does that figure include other bankruptcy claims purchased? Really looking forward to hearing more from you about these claims and other investments. Okay. To start with, I didn't calculate the current market value. I probably should have, but I didn't. I will say this, that relative to the $350,000 cost, it's a lot higher. I just don't remember what the number is, so I'll have to get that for you. I don't wanna speculate on what the number might be at the moment. It's just a lot higher than $350,000. That $350,000 balance sheet, that's the claims. That's it. That's what we got. There is some sharing in certain circumstances, but the bulk of it, we get that. So it's a fairly, it's a fairly robust number. At $30,000 Bitcoin price, it's not a small sum. We have 63 Bitcoin and that we got from mining, plus we're going to take these Bitcoin in kind. I'll get that number for you, and I'll certainly share it. I just neglected, so it's mea culpa. I neglected to have that number at my disposal. I hope you'll excuse the expression, I was otherwise occupied the last several days. Of course. Next question. Why are there no first quarter and third quarter transcripts for fiscal year 2021 and no first quarter transcript for fiscal year 2022? On the FRMO website, they appear to have been skipped over. This was discussed in the previous meeting, but I also now notice that the FRMO website directory has been changed to quarterly conference calls rather than quarterly conference call transcripts. The most recent quarterly call only remains available as an audio replay. Does FRMO plan to discontinue including text transcripts in the future? Okay. And- Yeah. Do you know the answer to that question, Steven? I didn't know they were even done. I do. I do. do. I do. Yeah. Well, I'm glad that I was reminded again. We did some catch up with some of the old inventory of transcripts, probably before the prior quarterly conference call. Between the prior quarterly conference call and today, the January 17th conference call transcript has been created. It just hasn't unfortunately yet made its way through the process chain to be on the website, but I dare say it will probably be on the website by tomorrow or the next day. As I mentioned last time, I've been engaged in trying to find an editor of suitable- Skill set, which includes sufficient financial background and professional writing background. That person I have found, we worked together for a little bit, a couple of months ago. He's actually been finishing a very high-level business journalism kind of career development program at Columbia University School of Journalism. That semester is going to be over within the next few weeks. One of the first things I'll have him do is to get through the backlog of the remaining few transcripts. He's actually very highly qualified. I look forward to working with him. Next question. In the recent FRMO Corp./ Fromex Equity Corp top five holdings and the CMSC February 2023 report published to the FRMO site, the MIH investment market value is reported at $12.8 million. I assume this is Miami International Holdings, Inc. How is the market value calculated here, as in the official quarterly report, the investment is carried at cost and of just $4.3 million. In a similar vein, could management also elaborate on how CMSC market value is calculated? Thank you. Okay. Just repeat the first part of it. The MIAX value. Where is that value coming from? You said. Let's see. You said on our website where we publish the crypto and also the top holdings. I believe that's what he's referring to. All right, what was the value? I didn't. I'm sorry. I didn't catch the entirety of the question. That's okay. you said, Miami International Holdings market value is reported at $12.8 million. Let me see. Well, the market value of Miami International is. Don't forget, the market value we own in Miami. Let's put it this way. The market value we own of Miami International is the outgrowth of the original Miami International investment, plus the write up of the Minneapolis Grain Exchange. You see, what happened is we exchanged Minneapolis Grain Exchange for MIAX. That higher value is the value we got in exchange at the then valuation for MIAX. Whenever that deal was done two years ago or so, that was the valuation we got. I believe the carrying value is something in the order of $7.25 a share, or $7.35 a share. I'm sorry I can't be more exact because I don't remember it to the penny, but something like that. We have the original cost basis of the MIAX we bought years ago. We have this thing, and the bulk of our MIAX is a MIAX that we acquired via the Minneapolis Grain transaction. Also you will recall that MIAX bought the Bermuda Stock Exchange from us. From everyone, actually. We got MIAX for that. That valuation you see is roughly seven and a quarter. I may be a few pennies off, but let's say seven and a quarter to be conservative. That's where it comes from. It's the value we got in exchange on that moment in time. It's not the cost basis anymore. It's the value we got in exchange for those two transactions. That's where the value comes from. When you go back in prior annual reports or prior reports, you'll see we had Bermuda and Minneapolis. That's where the valuation comes from. That's how it was valued. That was the fair value at time of transaction. Just to clarify, when you say MIAX, you are referring to Miami International Holdings. Am I correct? I'm referring to Miami International Holdings, to which we affectionately call it MIAX. Thank you. Okay. Thank you very much. Next question. Management and HK and Horizon Kinetics have talked often about U.S. debt to GDP and the unlikelihood of rates being raised very high. Given the rate hikes of 2022 that were some of the most aggressive in decades, how high would rates need to get or what other data would management need to see to reconsider their thoughts on the Fed's willingness or ability to hike to levels comparable to the 1970s? There is, after all, surely data that the Fed has that is not publicly available. No, you don't need data from the Fed. Let's put it this way. The 10-year treasury yesterday was yielding 3.58%. The 10-year treasury, I'm gonna just look it up right now. Take me one second. The 10-year treasury on June, I think it's 13th to 14th. I'll have it in a second. On that day when the Fed began their aggressive interest rate increase from the year, the 10-year treasury on June 15th, 2022 was 3.33%. What the Fed did is, yes, it raised interest rates very aggressively, but the market resisted that. The market resisted it because the economy can't handle it. The yield curve became inverted. When the yield curve became inverted, this created a mini banking crisis. Why'd it create a mini banking crisis? The long-term assets are earning less than the short-term assets or the short-term liabilities. That's a problem. Why should people keep their money in the bank and get, I'm making up a number, 2% in the bank when they can buy a treasury bill and get twice that? It led to a potential demonetization of the banking system, which is exactly what we were referring to, that the economy couldn't withstand it. Now look at the federal funds rate. Look at federal fund futures, you will see what the financial markets are implying for the future of interest rates. They're lower, not higher. The market can't withstand it. The market can't withstand it. I gave a lecture on this subject recently at Fordham University, I'll encapsulate it. I'll give you the 100-second version of it. The basic problem is that the industrial economy of 100 years ago, or maybe 125 years ago, it was capital intensive. You could largely control it with monetary policy changing its rates. The modern economy, where 40% of all GDP is government spending, that's federal, state, and local. That hasn't changed. That keeps rising. 40%, at least so far, has been immune to any changes in interest rates. That in itself is significant, but it's not the end. Why is it not the end? Let's say you took the healthcare industry. Half of the healthcare industry actually comes from the government for Medicare and Medicaid. Healthcare industry is 20% of the economy, roughly. Half comes from the government, so it's already accounted for in our calculation, but the other half is private. Are people dissuaded from taking treatment for the various ailments that afflict humanity because interest rates are higher? I think not. No one's gonna defer or very few people are gonna defer necessary treatment because interest rates are higher. I can go on, but higher interest rates is not going to deter people from private education. It's not gonna deter the food industry and the utility industry. Well, the higher interest rates is just a rate-based pass-through. You get a rate increase from the utility commission, no matter how high the rates are. I could keep going in that way, but I don't want to exceed the 100-second self-imposed time limit, but you get the idea. In a modern economy, you can't apply that because the modern economy is organized in a way that was inconceivable when Professor Irving Fisher of Yale University devised monetary theory. We're gonna have to think of something else, but I don't know what that is. The trouble is, nobody else does either. That's ultimately the problem. Okay. Does management have any thoughts or concerns about quote, "Operation Choke Point 2.0" end quote, as originally raised by Nic Carter of Castle Island Ventures, as well as the Cooper & Kirk law firm, later parroted by The Wall Street Journal? The concern is around a perceived coordinated effort by regulators and banks to make it more difficult for cryptocurrency companies to operate. This effort is said to include things like pressuring banks to stop providing services to cryptocurrency companies, launching investigations into cryptocurrency companies, and making it more difficult for cryptocurrency companies to obtain financing. A certain bank held by Horizon Kinetics Blockchain Development ETF was recently shut down by regulators. Are crypto frauds getting boiled here? I don't think so. That's one side of the coin. Note that those are opinions. Now let's go to some facts. The Chicago Board Options Exchange, Cboe, look at the ever-expanding digital asset exchange. Nasdaq just established a cryptocurrency custody unit. London Stock Exchange, not very many days ago, announced their creation of group to clear crypto transactions. Those are all regulated entities. Those can only be done with regulatory approval. I would say in reference to what people refer to as Operation Choke Point, I would say that if I were the regulator, a frightening thought for one and all, but if I were, I would say that I don't think the typical bank and cryptocurrency mix very well. I don't think crypto and leverage mix very well. I said that many times, typical bank is 10 times leverage. I wouldn't want to encourage much in the way of banks and cryptocurrencies. Exchanges are an entirely different mechanism. What people refer to as Operation Choke Point is merely a way of directing cryptocurrency into the proper regulated, transparent units, and not an effort to in any way inhibit the development of cryptocurrency as an asset class. Those are just three examples of regulated exchanges. Who are they regulated by? Obviously the government. I don't, the assertion that there's some organized effort to destroy crypto, I don't think it bears scrutiny. I say it doesn't withstand scrutiny. I guess it bears scrutiny. It doesn't withstand scrutiny. In the past, management has talked about the idea of uplisting FRMO to a larger exchange. Does this mean OTCQX or does this mean a major exchange like the New York Stock Exchange? What benefit, what actual benefit is there to FRMO attempting to list on a major exchange? The answer, quite simply is, like I said before, I have been otherwise preoccupied by a variety of things, so I haven't devoted very much efforts. It's another mea culpa. I've been otherwise occupied, so I've been doing other things. At some point in future, I'll have the free time to address this very important question. At the moment, I just don't have the available time to give it the consideration that it requires. I'm just gonna leave it at that. Okay. Is it a problem that over 50% of all Bitcoin nodes are hosted in unknown geographies? For example, over 50% of Bitcoin nodes are running on the Tor, that's T-O-R network. What are management's thoughts on the concentration of mining pools in the Bitcoin network and the geographical concentration of those hosted pools? How does management think about the lack of clawback of Bitcoin in the case of fraud and how that hinders adoption? Okay, let's do the fraud thing first. The blockchain has never been hacked. The idea is the blockchain is immutable. If you're gonna have the same sort of policy that a bank would have, if somebody can hack the blockchain, the Bitcoin blockchain, then you probably don't wanna own Bitcoin anyway. The presumption that you have to live with is no one's gonna be able to hack it. If no one's gonna be able to hack it, we don't need any clawback policy. If we're gonna have a clawback policy, they're gonna need a committee to decide on how that actually happens and in what cases it actually happens. Now we get to centralization, and it's just another step to central authority gets control over the Bitcoin, and before you know it, we're gonna be debased. I'm not encouraging that. As far as the nodes are concerned, well, if we knew exactly where every node is, it would be a lot easier to hack it. Why, if we want a system that's so far at least impervious to hacking, why do we want it to be public knowledge where every node happens to be? If someone with maybe a bad state actor with the resources to devote to that problem could actually figure out a way to hack it. I don't know what nation would undertake it, there are nations with the resources that might try it. The whole idea is anonymity or let's say independence or let's say resistance to a certain amount of scrutiny is a good thing if you want to protect the currency from those that would otherwise, that would otherwise seek to control it. For example, I actually started yesterday. I was reading it last night. I'm reading a book on the rescue of Norwegian gold when the Germans decided to occupy Norway. Look at it this way. In theory, wasn't it you would say if you were living at that time, isn't a great idea that we know exactly where the gold is and we know it's safe and secure? Well, we know exactly where the gold is, but the people who would seize the gold, they know where it is too. When the Nazis invaded Norway, they went straight for the gold. Maybe it would have been a lot better. In this particular case, the gold was rescued, but that wasn't always a guaranteed outcome. Wouldn't it have been a lot better if there wasn't a central depository for gold and if individuals from gold, so that would be a way of preventing its seizure? That was one of the problems in World War II. We've never even found an answer to it, that gold reserves of various nations were seized, and some gold and some art worth tremendous sums of money have never to this day been recovered. Do you really wanna do that with Bitcoin? I guess it's a debatable question, but count me down, for I have no desire to see it centralized and get answers to all those questions. Make it easy for the hackers. I guess that's my position. Here is the last question for today. In the first quarter fiscal year, 2023 FRMO conference call, management mentioned that M2 velocity was low because government spending is not being picked up in that metric. Could management explain this further? Well, I don't actually. I'm sure I said it. I just don't have those figures in front of me. It requires access to certain figures, and it'd take me a few minutes to figure out where in the databases they are. I'll try to write something about it in the future and explain it further. It comes from government. Basically, it comes from central bank figures that I'll have to look at. Apologize for just not being able to answer the question off the cuff. That was our last question for the day, so I think the only thing to do is to say your closing remarks. Okay. Well, once again, thanks everybody for, a lively question and answer session. I'm, delighted to have done it. Of course, we're gonna reprise this in about 90 days. Thanks so much for your support and look forward to getting another round of questions in about three months. Thanks, everybody. Good afternoon.